Do I pay VAT?

nala67

Hi -

I have a business in the hotel letting sector. My business finds customers to rent holiday homes. The full amount of the booking hits my account but I only keep a small percentage as commission, the rest is paid to the owner of the property. The business could work by the money going to the owner and the owner paying me x% but the point is (similar to air bnb) the full service is provided by me.

My total sales including the money to be paid to the owner is above £85k, but the money my company actually makes (before expenses) is below. Do I need to register for VAT? Any where we I can find guidance on this?

macman

The registration threshold of £85K is based on turnover, not profit. 
Based on that t/o, you are presumably operating as a ltd company, so why is your accountant unable to advise you on this?

Pennywise

Are you acting as agent or principal?
https://www.gov.uk/hmrc-internal-manuals/vat-taxable-person/vtaxper36820#:~:text=In a true agency relationship,principal must be clearly identifiable.
You need to establish, based on your contract with both the customer and the property owner whether you're an agent or principal.  I.e. are you merely "handling" the money on behalf of the property owner, and charging the property owner a fee for the marketing/management etc., or are you "buying" a week's accommodation from the property owner and selling it to the guest.
Or maybe you're acting as a travel agent?
https://www.gov.uk/guidance/travel-agents-and-vat-notice-7096
I'd suggest you engage a VAT specialist to examine the detail of your working arrangement, contracts, etc.  (A "Bog standard" general accountant is probably not experienced enough to advise unless they have other clients doing similar).